Gran Tierra Regulatory News (GTE)

15 February 2011

Gas Turbine Efficiency PLC

("GTE" or the "Company")

Proposed recapitalisation

Further to the announcement made on 31 December 2010, the Company announces today that it has entered into a non-binding term sheet with the holders of the majority of the outstanding A, B and C loan notes (the "Loan Notes") with regard to a proposed recapitalisation of the Company by the conversion of the Loan Notes into convertible preference shares of £1.00 each in the capital of the Company (the "Preference Shares"). As a result, the Loan Notes will no longer become due and repayable on 15 February 2011. The proposal is subject to certain conditions, including the signing of definitive documents and shareholder approval. The effect of the proposal will be that the holders of the Preference Shares will, when added to the ordinary shares that they currently own, initially have a total of approximately 80% of the voting rights in the Company.

Under the proposal, the Loan Notes will be converted at a rate of one Preference Share for each £1.00 of the accrued principal and interest outstanding on the Loan Notes. The Preference Shares will initially have a 1.62x liquidation preference so that, on any share sale, business sale, disposal (or other return of capital), equity issue (resulting in a change of control), liquidation or winding up of the Company (together an "Exit"), holders of the Preference Shares will receive (in priority to holders of any other class of share) a return of £1.62 for every £1.00 Preference Share held. If there has been no Exit prior to the date falling six months from their issue, the liquidation preference on each Preference Share will increase to 1.87x on that sixth month date. Thereafter, the liquidation preference will increase by a further 0.31x on the first anniversary, the date falling eighteen months from issue and the two year anniversary of their issue so that, if there has been no Exit within two years of their issue, the Preference Shares will receive (in priority to holders of any other class of share) a return of £2.80 for every £1.00 Preference Share held. Every six months after the second anniversary of their issue, the liquidation preference on the Preference Shares will increase by a further 0.06x.

On any Exit (within the first 6 months) the holders of the Preference Shares will initially retain approximately the first US$30 million. Shareholders should note that, should such Exit be below this figure, the holders of ordinary shares will receive nothing, with all proceeds going to satisfy the liquidation preference on the Preference Shares.

The Preference Shares will also be convertible into the Company's ordinary shares at any time at the election of the holder of such Preference Shares (in respect of their own shareholding) or at the election of the holders of 70% or more of the Preference Shares (in respect of the entire class of Preference Shares). The conversion price at which Preference Shares will convert into ordinary shares will initially be £0.06 per share. This will reduce every six months by £0.005, with a floor of £0.002 (the par value of the Company's ordinary shares). In addition, holders of Preference Shares will be able to vote each Preference Share on an "as converted" basis. The effect of the proposal will be that the holders of Preference Shares will, when added to the ordinary shares that they currently own, initially have a total of approximately 80% of the voting rights in the Company. As the conversion price falls over time, this percentage will increase.

The Company will also delist from AIM and re-register as a private limited company as part of the proposed recapitalisation. To this end, the Company has requested the London Stock Exchange (subject to shareholder approval) to cancel admission to trading on AIM of its ordinary shares on 22 March 2011.

Further details of the proposed recapitalisation and delisting will be included in a circular to shareholders calling a general meeting to seek approval, amongst other things, of the recapitalisation and to consider a proposal to delist and cancel the admission to trading on AIM of the Company's ordinary shares. It is the Company's intention that, following delisting, a trading facility will be established so as to give people the ability to trade shares; further details of this facility will be included in the circular.

It is anticipated that this circular will be posted to shareholders by the end of February 2011, when definitive documentation has been entered into by the Company and holders of certain of the Loan Notes. It is expected that the general meeting will be held during the week of 14 March 2011. The plan would, subject to shareholder approval, be to delist from the AIM market on 22 March 2011. It is anticipated that the Company would re-register as a private limited company at some time around the week of 11 April 2011. If the proposals are not approved by shareholders, or completion of the recapitalisation does not occur for any other reason, the Loan Notes will become repayable on 15 March 2011. All timings are subject to negotiation with the Company's principal Loan Note holders.

For further details, please refer to the announcement made on 31 December 2010, which can be found on the Company's website at page:

http://investors.gtefficiency.com/gte/pages/investors/financialnews/pressreleases?ref=114.

For further information:

Gas Turbine Efficiency plc

John Grant (Executive Chairman)

+44 (0)7768 465 042

Steven Zwolinski (Chief Executive Officer)

+46 (0)8546 10 528

 Matrix Corporate Capital LLPNick Ellis / Stephen Mischler +44 (0)20 3206 7000 Financial DynamicsNina Delangle+44 (0)20 7269 7181